The latest tweak to the Canada Emergency Business Account (CEBA) pandemic aid program is expected to allow farmers who run their business via personal bank accounts to seek CEBA loans.
Federal Finance Minister Chrystia Freeland announced Monday that “as early as” Oct. 26, CEBA will be available to businesses which until now have been operating out of a “non-business banking account.”
To now be eligible, a business that was operating as a business as of March 1 this year and meets the other current CEBA criteria must “successfully” open a business account at a Canadian financial institution taking part in the program. The deadline to apply is Dec. 31 this year.
CEBA provides zero-interest loans of up to $40,000 to small business and non-profits that have had “diminished revenues” due to the COVID-19 pandemic but still face “ongoing non-deferrable costs” such as rent, utilities, insurance, taxes and wages.
Repaying the balance of a CEBA loan on or before Dec. 31, 2022 results in loan forgiveness of 25 per cent, up to $10,000.
Federal Agriculture Minister Marie-Claude Bibeau, in a separate statement Monday, said the latest expansion “has been an important ask from farmers and will help ensure the financial strength of the thousands of small agricultural businesses across the country.”
She also reiterated the government’s Oct. 9 announcement of other pending “major expansions” to CEBA, which would raise its loan limit to $60,000 and double the non-repayable forgivable portion to $20,000, saying those expanded amounts will be “available soon.”
Since CEBA’s launch in April, the federal government boosted the payroll eligibility range for CEBA from between $50,000 and $1 million to between $20,000 and $1.5 million.
The government in May also expanded program eligibility to “owner-operated” small businesses that don’t have payrolls; sole proprietors receiving business income directly; and family-owned corporations that pay out dividends rather than payroll.
As of Thursday last week, the government said, over 774,000 CEBA loans have so far been approved, worth almost $31 billion in all.
Not including the number of farmers made eligible by the change announced Monday, Bibeau said over 85,000 farm businesses will have access to interest-free loans through CEBA, worth up to $5.1 billion.
Thus, she said, “there is the potential of providing up to $1.7 billion directly to farmers through the forgivable portion of their interest-free loans.”
Farm groups including the Canadian Cattlemen’s Association hailed the government’s move on Monday. Grain Growers of Canada chair Jeff Nielsen said on Twitter the announcement “could be good news for those farmers who are sole proprietorships/family farms and just have a normal bank account.” –– Glacier FarmMedia Network